5.5. SR 03-24-2003 - Laserfiche WebLink

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1. Provide funding for a "Local Road Improvement Program." One idea that was considered in recent years is the idea of a "local road improvement program". The idea was initially proposed in 2001 by the Local Road Advisory Committee in a report entitled Legislative Study of State Funding for Local Road Improvements. This program, as it was originally conceived, would have provided a source of state funding to support the costs of construction on local road projects that do not benefit from the current financing structure. [Note: While the original bill passed by the Legislature would have provided significant assistance to some cities with special needs, the title of the program - the Local Road Improvement Program - is somewhat misleading since its focus was actually more limited than the title suggests. Therefore, it is important to recognize the need for the other options recommended in this report.] In meetings of the Local Road Advisory Committee, city and county officials identified numerous examples of situations where both the state and a local unit of government might benefit from special state assistance beyond currently available state aid. Ultimately, the Local Road Advisory Committee recommended that the state establish an account to assist cities facing unique circumstances arising from external demands. The 2002 Legislature received the report and adopted legislation as part of the 2002 bonding bill that would have placed $20 million into the account. Unfortunately, Governor Jesse Ventura line-item vetoed the funding for the measure, however, the structure of the program is in place and could be implemented if funding were provided. The purpose of the special Local Road Improvement Program would have been to provide funding assistance to cities and other local units of government for road construction or reconstruction projects with statewide or regional significance that cannot be funded through other revenue sources. Despite the demise of the provision in the 2002 Legislative Session, the need for this mechanism has not diminished. The sponsors of this report recommend that the funds be restored to the program. 2. Provide cities greater flexibility to generate revenues through special assessments. Two specific changes in the way that cities are able to use special assessments as a financing source for local road improvements should be adopted. First, as noted in Section 2, the courts have limited cities' ability to use special assessments to finance public improvements - including street improvements - to their ability to prove benefits to the property. Under current interpretation, "benefit" is interpreted to mean "the increase in market value of the property". While no specific remedy is proposed within this report, it is suggested that consideration be given to seeking a remedy to this issue. Second, in some cases the infrastructure improvements necessary to serve a new development must pass by or through proPerties which are not currently ready for development. Under the current law, a city may choose to defer special assessments for water lines, sanitary sewers and storm sewers against such properties until later, when those properties develop. However, the deferral of special assessments for street improvements is not allowed under the current law. It is recommended that legislation be adopted which allows a city to defer special assessments for street improvements in such situations. Another modification to the special assessment laws in Minnesota that would make the tool more useful for cities looking for additional funding options would be to give special assessments the same 4O